Conflict Minerals Update: EU Regulations

In May of 2017 the European Union published its final version of its Conflict Minerals Regulation. The EU Conflict Minerals Regulation is quite different from the US Regulation, i.e. Dodd/Frank Section 1502, but is driven by the same goal of promoting responsible sourcing of minerals. The EU regulation entered into force June 8, 2017.  Although the regulation is primarily directed toward importers who will need to take action by January 1 of 2021, it is expected that many other companies in the supply chain will be impacted by the reporting process.

EU Conflict Minerals Regulation Description

Summary of EU Regulation and activities:

• Conflict Minerals:

  The metals tin, tantalum, tungsten and gold (3TG) and the minerals from which these metals originate are defined as Conflict Minerals under the EU Regulation. Cobalt and possibly other minerals are likely to be added in 2023 or beyond.

• Conflict Regions: 

  The EU Regulation is not specific in defining regions or countries considered to be “conflict countries.” Instead it introduces a concept called “Conflict-Affected and High-Risk Areas” (CAHRAs). It is left to importers to determine during their investigation whether their sources of the minerals are in fact CAHRAs. Thus, the EU regulation is global in scope.

• Reporting:

  The exact format and content of reporting by importers of 3TG is not specified by the EU Regulation, although a reporting guideline has been released. The report should demonstrate that the importing company has performed investigation and taken appropriate action under the regulation, following the OECD Due Diligence Guidance 5 step approach.

• EU Help:

  The EU is developing programs to assist importers to comply including;
• Guidance documents for small to medium enterprises (SMEs) assisting them in complying with the Regulation
• Reporting Guidelines released in 2017
• Contracts to organizations to fund projects that will assist smelters and mines to become conflict-free
• Guidance documents to assist importers to identify CAHRAs
• A non-comprehensive list of CAHRAs
• EU list of responsible smelters/refiners, a so-called “white list”
• Link to FAQs http://ec.europa.eu/trade/policy/in-focus/conflict-minerals-regulation/regulation-explained/

Conclusion

The EU Regulation requires reporting by companies that import conflict metals or minerals. The EU has identified 600 to 1000 companies that are likely to fall into this reporting requirement. Many other companies will be indirectly affected by this reporting requirement, and will be asked to support those direct reporting companies in their reporting effort.

The regulation does not require reporting by manufacturing companies that have conflict minerals in their products, although voluntary reporting by manufacturing companies is encouraged, and it is likely that many will choose to support voluntary reporting. There is already growing pressure on these manufacturing companies by non-governmental organizations (NGOs).

How Can Anthesis Help?

Anthesis Consulting Group is an international sustainability consultancy with many years of experience supporting companies who are striving to comply with conflict minerals regulations worldwide. Since 2012, our consultants have helped large multinational corporations with international supply chains to structure due diligence programs, engage with supply chains to document the origin of 3TG in products, and to prepare government submittals to demonstrate compliance with conflict minerals requirements.

Please contact Anthesis to learn more about how we can help your organization to responsibly source minerals from the supply chain and to comply with conflict minerals regulatory requirements worldwide.

For More Information Contact:

Dr. Richard Peagam, Principal Consultant

Anthesis Consulting Group, Europe

Email: Richard.Peagam@anthesisgroup.com

Tel: +44 203 753 9572

John Hennessey, Partner

Anthesis Consulting Group, North America

Email: John.Hennessey@anthesisgroup.com

Tel: 621 685 6128